The Claims Made policy form: you are protected only against claims, which occur and are reported to the company during the coverage period. The first year policy costs less because it responds only to claims, which occur and are first made during that year. Second and subsequent years through the fifth year involve yearly premium increases because each new policy responds to claims made in the present year and allows coverage to be continued for acts that occurred during previous years and which are reported in the current year.

Should you or the company decide to cancel your Claims Made policy, you must purchase an extended reporting or "tail coverage" in order to be protected against future claims. Failure to purchase Tail coverage" makes you responsible for any claims that are made against you after the policy expires.